March 3, 2017

GOP’s Senate leader expects deal on revenue, budget

Senate Minority Leader Stuart Ingle was in office 15 years ago, the only time the Legislature overrode a governor’s veto of the entire state budget.

That showdown pitted Republican Gov. Gary Johnson against a Legislature controlled by Democrats.

Ingle, R-Portales, said he is confident the impasse this year over spending and tax increases between majority Democrats in the Legislature and Republican Gov. Susana Martinez will not be a repeat of what happened in 2002.

He said all parties agree on the priorities. Namely, the state needs to boost revenue to pay for education and day-to-day services included in the proposed $6.1 billion operating budget and stash away more in savings to help its credit rating.

The state faces a shortage of $120 million just to pay for services, and it needs another $200 million to bring cash reserves above 3 percent. Martinez has promised 5 percent in savings.

“We have a budget that’s a couple hundred million short, and we have to take a hard look at that,” said Ingle, a farmer who’s been in the Senate since 1985. “We have to find the revenue and finish out the budget.”

Ingle was among the 13 senators, all Republicans, who this week voted against increasing the tax on gasoline and vehicle sales. All 26 Democratic senators and three Republicans voted for the tax increase, so it advances to the House of Representatives. That bill would patch the projected deficit with $180 million in new money.

Ingle said he and Sen. Steve Neville, R-Aztec, the ranking Republican on the Senate Finance Committee, prefer a comprehensive package that would balance the budget, restore cash reserves and eliminate the need for another special legislative session. Lawmakers had to return to Santa Fe last fall to close budget deficits for two years.

Neville, though, broke from Ingle and most other Republicans on Thursday, voting with Democrats for the gas tax increase.

As for Ingle, he said lawmakers need to incorporate parts of several proposals that are moving through the House and the Senate. The final package will probably include a tax on out-of-state internet sales, a rollback of contributions to local governments, an increase in fees on heavy trucks, and the expansion of the state gross receipts tax to more health-care providers.

Ingle said a conversation he had with Martinez about 10 days ago indicated that she supports that approach, though neither side discussed specifics.

The Senate Finance Committee is still considering House Bill 2, the document that authorizes spending for public education and other government services. The panel will probably advance the measure next week, as well as the necessary tax bills to balance the budget.

Neville said there were 100 proposed amendments to the budget, including some from the governor’s office.

“There were no suggested reductions of any consequence, including those from the fourth floor,” Neville said, referring to Martinez’s office.

He said the governor would be able to line-item veto some spending increases, but not $200 million. So unless Martinez agrees to some increased fees and taxes, the budget would not be balanced.

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The state House of Representatives approved a $7 billion budget on Thursday, sending to the Senate a plan for the next fiscal year that would provide nearly half a billion dollars in additional funds for public schools but which Republicans say amounts to an outsize increase in government spending. House Bill 2 would mark an 11 percent bump in New Mexico's budget, drawing on a surplus fueled by an oil and gas boom.

The state Senate narrowly approved a bill Thursday that would require just about anyone buying a firearm to undergo a background check. This legislation has been a priority for gun control advocates, but all 16 Republicans and four Democrats in the Senate said it would not prevent the sort of mass shootings that have spurred calls for such laws.

Analysts told lawmakers projections show New Mexico will have $1.1 billion in “new money” to spend compared to last year. But they also urged caution on how to spend that money, given the state’s reliance on volatile oil and gas revenues and the need to replace the money legislators used money from various state programs in recent years.

New Mexico school districts that had hoped to put a little more cushion in their budgets managed to persuade a sympathetic Legislature, but couldn’t get it past the governor’s veto pen. When she signed the 2018-2019 budget on March 7, Gov. Susana Martinez struck a line through $5 million state lawmakers had set aside to repay some school districts whose cash accounts had been swept by $40.

Gov. Michelle Lujan Grisham wants state legislators to allocate up to $380 million to pay off a backlog of tax credits owed to production companies that shot movies or television shows in New Mexico. Tripp Stelnicki, a spokesman for the governor, said the buildup of unpaid rebates "creates an uncertainty in the minds of producers.

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The state House of Representatives approved a $7 billion budget on Thursday, sending to the Senate a plan for the next fiscal year that would provide nearly half a billion dollars in additional funds for public schools but which Republicans say amounts to an outsize increase in government spending.